LiFePO₄ battery makers support line buildup amid cost, patent challenges
2014-3-12
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  • Companies are counting on localization efforts to help counter high material and production outlay, and accelerate sector development.

    China suppliers of LiFePO₄ batteries for large-capacity and high-power applications are confident of hurdling cost and patent issues in the long term to strengthen the category. They target to position the local segment as the chemistry ascends to the mainstream, replacing lead-acid and NiCd rivals, particularly in the UPS, emergency light and power tools segments. The variant now accounts for 30 to 40 percent of the country’s total sales of lithium products. This is projected to grow further in the next one or two years.

    To address current outlay challenges, a number of companies are investing in projects supporting materials localization to help reduce dependence on foreign providers and bring down manufacturing expenditure. Sichuan Yimei, for instance, has allocated $105 million to turn out anode inputs to complement its battery production. The undertaking consists of three phases, with operations commencing in September 2014, March 2016 and September 2018. Once all are running, the maker expects to generate annual revenue surpassing $300 million from its combined anode material and battery yield.

    As for the patent matter, most China suppliers are hoping for a positive result in the ongoing litigation between Phostech and the China Battery Industry Association. The latter has questioned the validity of Phostech’s right on the chemistry in the country.

    Fueling efforts is the spreading adoption of the battery type in communication equipment, power tools, emergency lights, and in electric vehicles and energy storage systems. This is because LiFePO₄ units exceed their traditional counterparts in terms of performance and environment-friendly attributes. These have capacity density reaching 170mAh/g and a life span of more than 2,000 cycles. At present, however, the “green” battery’s prices remain high at $0.41 to $0.46 per Wh, compared with its general-purpose and gel lead-acid counterparts priced respectively about $0.10 and $0.16.

    Even so, three major telecom carriers in China have been conducting trial projects replacing lead-acid with the lithium variant in backup power for base stations.

    In the power tools field, key players such as B&K, Bosch, Makita and TTI have switched to LiFePO₄, and other companies are anticipated to follow suit in coming years.

    Encouraged by this development, some local communication equipment manufacturers ventured into the line. They include Huawei and ZTE. The latter’s subsidiary, Shanghai Pylon, can offer LiFePO₄ batteries used in UPS and EVs. From $8.1 million to $9.7 million in 2012, the supplier realized $16 million last year as uptick in requirement rose between 20 and 30 percent.

    There are currently fewer than 100 makers of LiFePO₄ batteries for UPS, power tools and emergency lights in China. Local businesses make up 80 percent of thepool.

    More than 50 percent of the suppliers gather in Guangdong province, and the rest are spread over the provinces of Fujian, Zhejiang and Jiangsu.

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